Managing Director of the International Monetary Fund (IMF) Christine Lagarde says the country’s program with the IMF would end in April 2019 and not December 2018 as stated by the government.
Speaking in an interview with JoyBusiness, Christine Lagarde said Ghana’s program would not end in 2018.
“The program is to end in April , yes. I will tell you in April (whether Ghana was on track). We are all on track to delivering till April. Everything I’ve heard from the authorities is that everybody is committed to delivering till the end of the program as was concluded which has always been April.”
Christine Lagarde added, “I know that the team is working today as we speak with the Finance Minister’s team and of course they have to review numbers and to run they…but we are all working in good cooperation and I’m very hopeful that we will have the board meeting in late January or early February.”
Was Ghana’s IMF program worth it?
Christine Lagarde said, “I am in no doubt that the program was worth it when I look at the numbers, but the good question is could Ghana had done the same things without our support?”
She added, “I think what the investors would be looking at is whether Ghana under the current management can actually stay the course and revenue not only political stability for which it is well-known but also currently struggling and not going to binge borrowing and binge spending months of the elections are around the corner.”
Threats to Ghana ‘s economy
The IMF boss also highlighted the country’s rising debts and revenue shortfall as the biggest threat to the economy. Government is currently struggling to meet its revenue target for this year for the first seven months of this year. It’s currently about GHC3 billion short of the target.
Expenditure, on the other hand, has reached levels that can be described as worrying Christine Lagarde says this is an area that government may need to payattention to.
In 2015, The Executive Board of the International Monetary Fund (IMF) today approved a three-year arrangement under the Extended Credit Facility (ECF) for Ghana in an amount equivalent to SDR 664.20 million (180 percent of quota or about US$918 million) in support of the authorities’ medium-term economic reform program.
The program aims to restore debt sustainability and macroeconomic stability to foster a return to high growth and job creation while protecting social spending.
Some key issues of the credit facility included the freezing of public sector employment, reducing the budget deficit and zero financing of the budget deficit by the Bank of Ghana.
Meanwhile, in 2017, the Government of Ghana reached an agreement with the International Monetary Fund (IMF) to extend the Credit Facility programme by a year.